Harold S. Geneen, 87, Dies; Nurtured ITT

By KENNETH N. GILPIN

Published: November 23, 1997

Harold S. Geneen, an executive seen by many as both the architect of the international conglomerate and the most significant and controversial businessman of the 1960's and 70's, died of a massive heart attack at New York Hospital on Friday evening, his secretary, Marie Serio, said. He was 87.

An accountant by training, during his life Mr. Geneen was compared to Gen. George S. Patton, Alexander the Great and Napoleon. He was called a great leader but was also a corporate autocrat who treated foreign governments like subsidiaries. He was a man, some said, who would have bought up the world if given the chance.

As it was, he made the most of the opportunities that were provided.

When he was named president and chief executive of the International Telephone and Telegraph Corporation in 1959, it was a company concentrating on the foreign telephone business, one that had less than $800,000 a year in revenue.

Over the next two decades, Mr. Geneen transformed ITT, virtually inventing the international conglomerate. He did it by buying companies. All sorts of companies.

When he stepped down as chief executive at the end of 1977, ITT was the 11th-largest industrial company in the United States, a colossus with more than 375,000 employees and $16.7 billion in revenue.

Among other things, the companies he bought -- some 350 in 80 countries -- baked bread, rented cars, built houses, made grass seed, wrote insurance policies, rented billboards and ran hotels.

Along the way, Mr. Geneen stretched his people and his company to the legal limits, scarring the company's image to the point where it became a popular symbol of corporate arrogance and insensitivity.

There were charges in 1972 and 1973 that ITT had offered $400,000 in contributions to the Republican National Convention in return for a favorable settlement in an antitrust case. The charges, prompted by a memo from Dita Beard, an ITT lobbyist, were denied and never proved.

There were also disclosures that in 1970 ITT tried to block the election of Chilean President Salvador Allende Gossens, a Marxist who nationalized an ITT subsidiary and was overthrown in 1973.

ITT initially denied the charges but subsequently admitted in 1976 that it ''might'' have sent $350,000 to Chile in 1970 for what it described as ''political'' purposes. Mr. Geneen maintained that the contribution was legal under Chilean and American law and had not been used to support any irregular or violent action.

Evidence of questionable ITT payments to foreign governments and others in the 1970's kept appearing after Mr. Geneen left the company.

In its sweep, Mr. Geneen's career brought him into the heart of debates about an individual's role in a corporation and a corporation's role in the world that have preoccupied the financial community for two generations.

He was lionized and demonized for everything from ITT's voracious acquisitiveness to the compensation of its executives. Before shareholder revolts were common, there was shareholder dissension at ITT, and the allegations about interference in Chile made ITT board meetings a magnet for demonstrations .

But nothing shook Mr. Geneen's self-confidence. Among the 250 acquisitions ITT made during his 18-year tenure were the Sheraton hotel chain and Avis Rent-a-Car. At the same time, ITT's sales rose from about $700 million to about $17 billion. Its profits rose from $29 million to $550 million.

Mr. Geneen's management practices and style were widely imitated. His diversification strategy was one that other American business moguls, including Charles Bludhorn, the man who transformed what was once Gulf and Western, and J. Peter Grace Jr., who ran W. R. Grace & Company, rushed to embrace.

But Mr. Geneen, who was born in Bournemouth, England, and came to the United States when he was a year old, was there before anyone else.

''He had the ideas first,'' said Rand V. Araskog, who became ITT's chairman and chief executive in 1979 and has spent the last two decades selling or spinning off most of the companies Mr. Geneen acquired.

''Everyone else was a follower,'' he said.

Mr. Geneen's management philosophy, which has been studied in business schools, dissected in academic papers and was the subject of a book, ''Managing,'' which he co-wrote in 1984, was to give his managers overlapping responsibilities so that checks and balances existed on everyone. Confrontations, which were inevitable in such a system, were tolerable as long as all facts were made available.

And as the man at the top, Mr. Geneen, the prototypical workaholic, made sure he had all the facts. He worked 70 to 80 hours a week when he ran ITT and was a man who always needed to know everything.

More than 100 managers were required to furnish him with weekly reports and more detailed filings every month. A month before he retired, 146 reports totaling 2,537 pages poured into his office. He read them all.

''I don't believe in just ordering people to do things,'' he said in an interview for an article in The New York Times in 1977 that looked back at his tenure at ITT.